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K L UNIVERSITY

SCHOOL OF MANAGEMENT SCIENCES

Vijayawada 26 September 2010

CONTENTS

Introduction to Export Documentation Overview of Legal Framework Documentation Framework

Introduction to Export Documentation
WHAT IS THE PURPOSE OF EXPORT DOCUMENTATION? 


The paperwork that is required for an export sales transaction The means by which the shipping process is facilitated and recorded. Documentation is essential for moving goods through the channels of distribution, transferring responsibility or possession, clearing goods through customs, and facilitating payment according to the agreed upon terms. 

This is essential if the seller wishes to get paid  Export documentation provides important information that is used by the seller. . governments. the freight companies.Introduction to Export Documentation WHAT IS THE PURPOSE OF EXPORT DOCUMENTATION?  Export documentation provides evidence that the negotiated terms between the buyer and the seller have been complied with. and the buyer.

OVERVIEW OF LEGAL FRAMEWORK .

Renamed as Foreign Trade Policy. Foreign Trade governed by Foreign Exchange (Development & Regulation) Act. 1992 and Rules and Orders issued thereunder. This would give rise to inflow and outflow of foreign exchange.OVERVIEW OF LEGAL FRAMEWORK   Foreign Trade of a country consists of outward and in ward movement of good and services. . Replaced earlier legal regime of Import and Export (Control) Act. 1947. Objective: Development and regulation of foreign trade.

2000 Manner of Receipt and Payment. Rules. Regulations. 2000 .independence period Foreign Exchange Regulation Act (FERA) was introduced. 1999.  RBI frames rules and regulations under FEMA provisions  Important regulations relating to foreign trade : Foreign Exchange Management    Export of Goods And Services.  Post . Regulations.  Exchange control introduced in India in the early period of Second World War ± 1939. 1999.) FEMA  Payments for export and import trade transactions are regulated by Foreign Exchange Management Act.  Onset of liberalization (external sector of economy/industrial licensing/Partial convertible of Rupee and full convertible on current account) Foreign Exchange Management Act (FEMA). 2000 Current Account Transactions.  Deals with various regulations of foreign exchange like holding and transactions of foreign exchange ± export of goods and services realization repatriation of foreign exchange etc.  Objective : Facilitate external trade / payments / promote development and maintenance foreign exchange market in India.OVERVIEW OF LEGAL FRAMEWORK (Contd«.

EXPORT (Quality Control & Inspection Act)  To safe guard the image of the country as a producer and exporter of quality of goods and services ± Export (Quality control and Inspection) Act 1963 Rules and regulations relating to export of commodities.OVERVIEW OF LEGAL FRAMEWORK (Contd«.  . international conventions etc. modes of transportation.1962.) CUSTOMS ACT  Physical operation of foreign trade transactions of export and import of goods and services through various modes of transportation is conducted under Customs Act.

EXPORT DOCUMENTATION FRAMEWORK .

.EXPORT DOCUMENTATION FRAMEWORK NEED FOR DOCUMENTATION  Why documentation in Export ± Import business Buyer & Seller in different countries Commercial / Legal practices differ Business disputes : Laws governing contracts differ  Documentation formalities are necessary to enable the importer to get the goods and the exporter to get sale value and export incentives from the Govt.

EXPORT DOCUMENTATION FRAMEWORK COMMERCIAL PERSPECTIVE GOODS GOODS EXPORTER CONTRACT IMPORTER PAYMENT DOCS DOCS PAYMENT DOCS CARRIER EXPORTER BANK PAYMENT DOCS GOODS IMPORTER BANK CARRIER .

Israel) Bilateral and multilateral trade agreements . Restricted and prohibited goods.EXPORT DOCUMENTATION FRAMEWORK Government Perspective  Laws regulate export ± imports as well as movement of foreign currency. Regulations governing quality and standards Regulate and monitor foreign currency flows Valuation of goods for calculation of customs duties Political reasons: Import and export of goods from/to a country not allowed (West Asian countries vs.

Legalized Invoice : Constitute a sworn affidavit by exporter before the consulate as to genuineness and correctness of the sale.EXPORT DOCUMENTATION FRAMEWORK Importing country·s Perspective Satisfy Govt. Customs Invoice: Format prescribed by the customs of the importing country . regulations Maintain safety standards Certificate of origin Valuation of goods for calculation of customs duties Consular Invoice : Specified format and stamped by commercial consular of the country to which goods are exported.

Export Credit Duty Drawback Incentives under Foreign Trade Policy Transport Assistance Priority in placement of railway rakes .EXPORT DOCUMENTATION FRAMEWORK Incentives Perspective  Export assistance and incentives integral part of policy.

e. which have to be prepared by the exporter in order to arrange export of his consignments.EXPORT DOCUMENTATION FRAMEWORK   There are a number of documents. (a) Commercial Documents and (b) Regulatory Documents . These documents can be mainly classified into two i.

.EXPORT DOCUMENTATION FRAMEWORK Commercial Documents Principal documents are The Commercial Invoice. Packing List Bill of Lading/Air Waybill Certificate of Inspection/Quality control Certificate of origin Bill of Exchange and Insurance Certificate Letter of credit & Contract.

EXPORT DOCUMENTATION FRAMEWORK Commercial Documents  Auxiliary documents : Pro forma Invoice Shipping instructions Mate's Receipt Letter to bank of collection/negotiation of documents .

EXPORT DOCUMENTATION FRAMEWORK   Regulatory Documents Regulatory documents associated with the preshipment stage of the export transaction. They are: ARE Form ( for Central Excise) Shipping Bill (Sea / Air) Bill of Export (Land) PP form (Post parcel) SOFTEX form (Computer software Non-physical form) SDF form Bill of Entry (Imports) .

Markings and Labeling Mode of transport . Price. Packing . Indian context exporter must have written evidence Complex Problem: Applicability of particular country¶s law ³Proper law´ ± Where contract is to be carried out : Exporting country¶s law is the applicable. Delivery : Place and Schedule .Export Documentation Framework  Export Contract : No standard format Documentary evidence to show there is an agreement. Quality. Currency Taxes and Charges.  General Conditions : Parties. Description of goods.

Documentation Mode of Payment .Export Documentation Framework  General Conditions --------Contd. Insurance . Passing of title Export / Import Licenses Force Majeure Settlement of disputes Applicable Law . Credit Period.Jurisdiction . Inspection . if any Passing of risk .

quantity. details of quality. trade terms. . It is therefore advisable to seek legal advice before signing the contract. delivery terms. and payment terms. It is a legally binding document.EXPORT DOCUMENTATION FRAMEWORK Commercial Documents Document Quotation Functions An offer to sell goods and should state clearly the price. Prepared by Exporter Sales Contract An agreement between the buyer and the Exporter and seller stipulating every details of the Importer transaction.

It is a formal demand note for payment issued by the exporter to the importer for goods sold under a sales contract. It is also used for the customs clearance of goods and sometimes for foreign exchange purpose by the importer. their value. It should give details of the goods sold. informing the buyer of the kinds and quantities of goods to be sent. size and similar characteristics). payment terms and trade terms.EXPORT DOCUMENTATION FRAMEWORK Commercial Documents Document Pro Forma Invoice Functions An invoice provided by a supplier prior to the shipment of merchandise. Prepared by Exporter Commercial Invoice Exporter . and importation specifications (weight.

Exporter Inspection Certificate Inspection A report issued by an independent surveyor (inspection company) or the Company or Exporter exporter on the specifications of the shipment. etc. and/or price. quantity. . required by certain buyer and countries. including quality.EXPORT DOCUMENTATION FRAMEWORK Commercial Documents Document Packing List Functions Prepared by A list with detailed packing information of the goods shipped.

etc. An insurance certificate certifies that the shipment has been insured under a given open policy and is to cover loss of or damage to the cargo while in transit. A certificate to certify the products are conformed to a certain international/national technical standard.EXPORT DOCUMENTATION FRAMEWORK Commercial Documents Document Insurance Policy/ Certificate Functions An insurance policy is an insurance document evidencing insurance has been taken out on the goods shipped. such as product quality. safety and specifications. and it gives full details of the insurance coverage. Prepared by Insurer or Insurance Agent or Insurance Broker Product Testing Certificate Accredited Laboratories .

EXPORT DOCUMENTATION FRAMEWORK Commercial Documents Document Health Certificate Functions Document issued by the competent country when agricultural or food products are being exported. Prepared by Exporter / Inspection Authority Phytosanitar y Certificate Exporter/ Authority . to certify that they comply with the relevant legislation in the exporter's country and were in good condition at time of inspection. prior to shipment and fit for human consumption. Frequently an international requirement that any consignment of plants or planting materials importing into a country shall be accompanied by a Phytosanitary Certificate issued by the exporting country stating that the consignment is found substantially free from diseases and pests and conforms with the current phytosanitary regulations of the importing country.

into the countries that are signatories to the ATA Convention. New Zealand and UK's customs on solid wood packing material. Exporter/ Authority . It is mainly required by the US. Australia. samples and professional equipment. Canada.EXPORT DOCUMENTATION FRAMEWORK Commercial Documents Document Functions Prepared by Exporter or Inspection Company Fumigation A pest control certificate issued to certify that Certificate the concerned products have been undergone the quarantine and pre-shipment fumigation by the approved fumigation service providers. ATA Carnet An international customs document used to obtain a duty-free temporary admission for goods such as exhibits for international trade fairs.

consignee. Certified by a consular official of the importing country stationed in the foreign country. it is used by the country's customs officials to verify the value. showing shipment information such as consignor. . quantity and nature of the shipment. and value description.EXPORT DOCUMENTATION FRAMEWORK Commercial Documents Document Consular Invoice Functions Prepared by A document required by some foreign Exporter countries. etc.

EXPORT DOCUMENTATION FRAMEWORK Transport Documents Document Mate's Receipt Functions Proof of receipt of goods by the carrier. The customer usually needs the original as proof of ownership to take possession of the goods. Shipping Company . Prepared by Shipping Company Bill of Lading (B/L) An evidence of contract between the shipper of the goods and the carrier.

such as details of invoice. This serves as a receipt of goods for delivery and states the condition of carriage but is not a title document or transferable/ negotiable instrument. buyer. vessel/flight date. including packing information.EXPORT DOCUMENTATION FRAMEWORK Transport Documents Document Air Waybill (AWB) Functions Prepared by Airline A kind of waybill used for the carriage of goods by air. port/airport of loading. weight / volume of merchandise and the fullest details of the goods. place of delivery. consignee. A list providing information needed for Shipper transportation purpose. country of origin. port/airport of discharge. Packing List . shipping marks / container number.

Bill of An unconditional written order. in which the Exchange importer addressed to and required by the (B/E) or Draft exporter to pay on demand or at a future date a certain amount of money to the order of a person or bearer. Exporter . at the request of the buyer. Credit evidencing the bank's undertaking to the seller to pay a certain sum of money provided that specific requirements set out in the D/C are satisfied.EXPORT DOCUMENTATION FRAMEWORK Financial Documents Document Functions Prepared by Issuing Bank upon an application made by the Importer Documentary A bank instrument began (issuing or opening bank).